As in other states, Michigan’s physician supply is relatively “inelastic,” meaning the number of physicians cannot increase quickly to accommodate a rising demand for medical services created by an influx of newly insured Medicaid enrollees. Michigan physicians have little if any capacity to expand the number of patients they treat. A survey by the Michigan Department of Community Health and Public Sector Consultants found that about 30,400 physicians were actively practicing in Michigan in 2011. According to the Michigan Department of Community Health:
- Less than two-thirds (65 percent) of Michigan’s licensed physicians are actively caring for patients.
- Less than one in five active Michigan physicians (19 percent) are under 45 years of age, and more than half (60 percent) are either approaching or past retirement age.
- More than half (54 percent) reported plans to retire no later than 2021.
- Less than one in five (17 percent) plan to continue to work more than 20 years.
- More than two-thirds (71 percent) of Michigan’s active physicians reported planning to retire by 2026. [*]
Yet the demand for health care continues to rise. A number of economic studies indicate the newly insured will nearly double their consumption of medical care.[†] Furthermore, an aging population will require more medical care.
[*] “Michigan Department of Community Health Survey of Physicians,” (Public Sector Consultants Inc. and Michigan Department of Community Health, 2011), 7, http://goo.gl/G2XeM (accessed May 16, 2013). The primary reasons given for retirement or reduced hours were age (69 percent), “increasing administrative/regulatory burden” (38 percent) and “inadequate reimbursement for services” (30 percent). Ibid., 6, 8.
[†] Jack Hadley and John Holahan, “Covering The Uninsured: How Much Would It Cost?,” Health Affairs (2003) http://goo.gl/cAqJ0 (accessed May 16, 2013). For an actuarial analysis of how insurance affects the medical consumption of diverse populations, see “Cost of the Future Newly Insured under the Affordable Care Act (ACA),” (Society of Actuaries, 2013), http://goo.gl/XfhWa (accessed May 16, 2013).